AIA news

New guidance for members

We expect firms providing higher risk services to recognise the risks, have a documented firm-wide risk assessment, strong verification procedures and robust procedures for monitoring ongoing relationships with clients.

This new guidance has been specially formulated for AIA Members in Practice offering trust or company service work and is influenced by the outcome of the 2022 Thematic Review.

Access new guidance: www.aiaworldwide.com/my-aia/aml/ tcsp-risk/

AIA NEWS

THEMATIC REVIEW

Trust and Company Service Providers Thematic Review published

The United Kingdom National Risk Assessment (2020) highlighted trust and company service providers (TCSPs) as being at a higher risk of exploitation by criminals to facilitate money laundering. 51% of AIA’s total population of supervised firms currently offer trust and company services to clients. In Spring 2022, we undertook the TCSP Thematic Review for Small and Medium Sized Practices to assess the nature of these services and to explore the risk that they may be used to facilitate money laundering.

The report sets out a selection of the qualitative and quantitative data and trends we observed from the responses to questionnaires we sent to firms offering TCSP services. The findings show that all the firms we surveyed consider and assess the risk of providing TCSP services as lower when provided to existing clients with a clear business rationale expressed for the service.

The thematic review highlighted examples of good practice and recommended improvements over several key areas:

● firm-wide procedures;

● customer due diligence;

● risk factors;

● enhanced due diligence;

● suspicious activity reporting; and

● training.

The report also noted how the results of the thematic review have impacted AIA’s monitoring and supervision strategy.

AIA Director of Operations and MLRO David Potts said: ‘We monitor our supervised population and take measures where necessary to ensure compliance. Understanding the underlying risk factors within our supervised population means we can better educate our firms to identify, mitigate and avoid these risks and protect themselves from unwittingly aiding economic crime. The new guidance released by AIA today is another key tool for our supervised firms.’

See www.aiaworldwide.com/insights/aml/tcsp to read the report.

ANNUAL GENERAL MEETING

AIA Annual General Meeting 2022

AIA held its 90th Annual General Meeting on 20 May 2022. The AGM was attended by AIA President Shahram Moallemi and AIA Vice Presidents Phillip Ford and Linda Richards. All the resolutions of the AGM were passed, and Linda Richards, Twaraq Oozeerally, Hugh McCormack, and Andrew Lamb were re-elected to Council. The Council represent members of the Association and are responsible for setting AIA’s strategic direction and priorities.

AIA President Shahram Moallemi said, ‘The Covid-19 pandemic has been a catalyst for change. We have increased the pace of delivering our educational programme, for both qualifications and continuing professional development, allowing greater flexibility for both members and students and increased capacity in our global markets.

‘Despite the challenges we have faced this year, we have maintained the highest standards in professional education and membership, developed as an organisation and delivered many of the core strategic objectives we had set ourselves. ‘Our strategy remains focused on delivering at speed to ensure the continued growth of the AIA and fully committed to our core values of collaboration, innovation, excellence, integrity and respect.’

Further details including the President’s full statement, available within the Annual Report and Accounts, and voting results can be found here: www.aiaworldwide.com/ my-aia/agm-2022

ECONOMIC CRIME

A new UK Bill aims to drive out dirty money

The social and economic cost to the United Kingdom from economic crime is estimated at £8.4 billion per year. To help tackle this, the UK government recently brought forward the Economic Crime (Transparency and Enforcement) Act that included provision for a new Register of Overseas Entities owning or buying property in the UK.

A new Economic Crime and Corporate Transparency Bill has now been announced which aims to drive out dirty money from the UK and crack down on kleptocrats, criminals and terrorists who abuse its open economy.

Between 2015/16 and 2020/21 just over £1.3 billion was recovered from criminals using Proceeds of Crime Act powers.

The new reforms will broaden the Registrar of Companies’ powers so that they become a more active gatekeeper over company creation and custodian of more reliable data, including new powers to check, remove or decline information submitted to, or already on, the Company Register.

Reforms will also include the introduction of identity verification for people who manage, own and control companies and other UK registered entities. This aims to improve the accuracy of Companies House data, support business decisions and law enforcement investigations. Linked to this are new investigation and enforcement powers for Companies House and the introduction of better cross-checking of data with other public and private sector bodies, alongside enabling businesses in the financial sector to share information more effectively to prevent and detect economic crime.

AIA Director of Operations and MLRO David Potts said: ‘AIA strongly supports the introduction of measures which seek to tackle economic crime. We will continue to work with the UK government and agencies such as Companies House to ensure these reforms are effective.’

AUDIT REFORM

Audit Reform

Although not present within the text of the Queen’s Speech itself, the UK government has published outline proposals to publish a draft Audit Reform Bill, which were included within the supporting papers issued alongside the speech. The main elements include:

● Establish a new statutory regulator, the Audit, Reporting and Governance Authority, that will protect and promote the interests of investors, other users of corporate reporting and the wider public interest.

● Provide new measures to open up the market, including a new approach of managed shared audit in which challenger firms undertake a share of the work on large-scale audits.

● Bring the largest private companies in scope of regulation in the definition of ‘public interest entities’, recognising the public interest in companies of this size.

● Give the new regulator effective powers to enforce directors’ financial reporting duties, to supervise corporate reporting, and to oversee and regulate the accountancy and actuarial professions.

● Reform the regulation of insolvency practitioners to give greater confidence to creditors. Strengthen corporate governance of firms in or approaching insolvency so that ‘asset stripping’ can be more effectively tackled.

AIA Director of Operations David Potts said: ‘AIA has worked with the UK government, the Financial Reporting Council, and other stakeholders, to ensure the proposals are robust, appropriate and achievable. We are encouraged that there has been some progress towards implementing changes recommended in the 2018 Kingman report. However, we would argue that this progress is long overdue, and the government should ensure it remains committed to implementing the proposed reforms quickly in order to remove uncertainty around their detail and timing.’